Notes on Political Crisis; Economy Minister Resigns John Neagle

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12-1-1988 Peru: Notes On Political Crisis; Economy Minister Resigns John Neagle

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Recommended Citation Neagle, John. "Peru: Notes On Political Crisis; Economy Minister Resigns." (1988). https://digitalrepository.unm.edu/notisur/2481

This Article is brought to you for free and open access by the Latin America Digital Beat (LADB) at UNM Digital Repository. It has been accepted for inclusion in NotiSur by an authorized administrator of UNM Digital Repository. For more information, please contact [email protected]. LADB Article Id: 073918 ISSN: 1060-4189 Peru: Notes On Political Crisis; Economy Minister Resigns by John Neagle Category/Department: General Published: Thursday, December 1, 1988

Demands that President Alan Garcia resign, call early elections or turn power over to an independent cabinet are escalating. Some critics argue that the government's mistakes are forcing Peru into "semi-insurrectional" and "pre-revolutionary" conditions. Consequently, they say, fundamental changes are necessary to preserve democracy. Rumors of a military coup continue, and many Peruvians consider a coup "inevitable." Some politicians warn that the country is on the brink of civil war. Business groups and the rightist party Solidarity and Democracy have called for Garcia's resignation. In response, Prime Minister Armando Villanueva has said that "rivers of blood" would flow if conservatives returned to power. Vice President Luis Alberto Sanchez, 88 years old and blind, is reportedly ready to take over. Senators Javier Diez Canseco and Javier Valle Riestra of the governing American Popular Revolutionary Alliance (APRA) have proposed advancing the 1990 presidential elections by several months through a constitutional amendment. Next, Garcia has been called on to appoint a respected independent figure as prime minister and allow him to form a multiparty Cabinet with authority to deal with the deepening economic crisis without interference by the president. In a statement televised on Nov. 27, independent legislator Alfredo Barnechea addressed Garcia: "You are the only person responsible for the crisis. People have asked you to resign because they think you are the problem. But since you want to stay on, and because we're on the edge of an uncontrollable situation, I urge you to form an emergency cabinet." The wave of strikes and street demonstrations afflicting Peru was triggered by the government's anti- inflation program introduced in early September, and has been strengthened by subsequent price hikes and galloping inflation. The September package raised prices by an average 114.1% for that month, and 40.6% in October. The government's budget deficit was not reduced. Peru's biggest labor confederation has called a general strike for Dec. 1 to protest the government's latest price hikes. Inflation is currently running at 2,000% per year; the rate for 1988 is expected to top 1,500%. Inflation has been estimated at 35% for November, and is expected to reach 80% in December. To protest government austerity policies, 35,000 bank employees launched an indefinite strike on Nov. 24. As a result, the country's banking and finance system has been partially paralyzed. Municipality and Labor Ministry employees announced similar actions to pressure the government for salary hikes. Meanwhile, strikes by textile workers, judiciary and social welfare employees, among others, continue. Meanwhile, violence has been stepped up by Sendero Luminoso guerrillas and paramilitary groups reportedly linked to the government. Economy Minister Abel Salinas resigned Nov. 27 to protest Garcia's veto of his economic program. The president named a party aide, Carlos Rivas Davila, as his successor. Austerity measures to be implemented this month were secretly negotiated with the World Bank and the IMF, and appeared to be intended to facilitate a resumption of multilateral loans to Peru. When the package was presented to Garcia, he reportedly changed it from a medium-term economic adjustment program into a simple set of price increases, accompanied by a 50% currency devaluation. Aides said that when Salinas announced the measures on television Nov. 22, he had already decided to resign. (Basic data from AFP, 11/25/88; New York Times, 11/30/88)

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